An Important First Step to an Effective Tax Relief Strategy

In order to succeed at something you’ve got to have a plan. Business is no different. Yet, depending on the type of business you’re operating, the plan may vary. For instance, if you are raising money from investors or bringing a company public, you need a lengthy and comprehensive plan such as an effective marketing plan. It must not only provide a realistic tax relief strategy for running the business successfully, but it must also demonstrate to potential investors your knowledge of the business and your ability to foresee future problems and solve them successfully. A good plan will also include comprehensive market research and your response to it, and a detailed proforma that shows worst case, best case and most likely financial projections over a three to five year period. It takes three to five months to put a comprehensive business plan together. These days it’s much easier to put together a “canned” business plan. Just buy one of a hundred “fill in the blanks” software applications or download the forms from the web and tailor it to your needs. In an hour or so you’ll have a 40 or 50 page professional looking business plan with financial projections and color coded diagrams. The problem is that your professional looking plan will be almost useless due to it not being tailored to your business needs.

It's a Road Map

A business plan is no different than any other sort of plan. Things happen along the way that may take you off course or down a bumpy road. The question is how should you respond to the distractions? Years ago I decided to make a vacation of seeing the beauty of this country by going from national park to national park camping in a tent. Because I was beginning my journey in Long Island, New York, I had no other choice other than to head west. I plotted a course that included the most interesting and beautiful places I knew of and laid it all out on a map. I became a member of AAA (mentors), both for their road side assistance program and for their incredible flip-chart style maps. I bought the needed supplies, got my car checked out by a mechanic, and planned my departure date. Everything was ready for the road trip. I figured I’d get a good night’s sleep that night and get on the road early to beat the rush hour traffic. I got to bed early and laid there waiting to fall asleep. I was way too excited – there was no way I could get myself to sleep. So I got up at 11 p.m., took a quick shower and hit the road 4 and a half hours early. My trip had barely begun and I was already off the course of my plan. By six a.m. I was very sleepy, so I took a nap in the car at a truck stop. I arrived in St. Louis a little earlier than originally expected, but fairly close to the plan I had put together. And so it went for the rest of the trip – my carefully crafted plan was more of a road map (literally) than a set of hard and fast rules. And so it will be with your business plan. There will be detours; some positive, some negative. The key to success is distinguishing between the two types of detours and working through them effectively and appropriately.

There's More Than One Right Way

One hint is to be concerned more with the outcome of the results other than with the path (method). In other words, if the deviation is simply a different way of producing the same or a better outcome, it’s a positive deviation. If the deviation results in missing an important goal or deadline, it’s a negative deviation. This is why building a successful business is more of an art than a science. Dishonest Partner(s), inconsistent employees and unreliable vendors are all negative deviations. If you find yourself in business with these types of people, you need to make big changes that would benefit you positively and get rid of the negativity. You cannot build a successful business surrounded with these kinds of people. Missed goals, surges in orders, running slightly behind schedule, an ad campaign that under-produces. These are all deviations that can be worked around, and overcome. You need to evaluate them as part of the “big picture” and decide whether they are heading you down a dead end, or pointing to another path that will get you to a better result. Here’s a technique that will help you to evaluate deviations and help you successfully overcome them: Have ten backups for each major part of your plan and five backups for the minor parts of the plan! As a kid, I was enthralled with the Apollo space program. I watched every launch, every moon landing and every moon walk on T.V. During one of the press conferences after the Apollo 11 mission, a reporter asked Neil Armstrong, “Sir, suppose you were sitting there in the Lunar Module about to blast off from the moon and the rocket didn’t fire. You’ve only got 2 hours of oxygen left at that point. What would you do, what would be your plan? Would you pray, would you ask to speak to your wife on the radio? How would you spend your last two hours?” Armstrong answered without hesitation. He said, “I’d spend the two hours successfully fixing the problem.” That’s the difference between success and failure. Successful people solve problems; unsuccessful people get stopped by them in their tracks. Many people now realize that a big part of an astronaut’s training is working in flight simulators responding to unexpected problems. In fact, those simulators are programmed with every imaginable problem they can encounter and the astronauts are successfully trained to “work the solutions” one at a time until the problem is completely solved. Business is no different. You will be faced with many problems. A big part of handling them effectively is thinking them through ahead of time and preparing your responses and solutions in advance. The more alternative solutions you can develop, the better prepared for setbacks you will be. If you want more confidence and certainty, you can do this process with every area of your business plan. Sit down by yourself or with your partner (or mentor) and brainstorm each issue and problem you come up with. The more alternative solutions you have, the better prepared you’ll be to solve the unexpected problems.